Sherrod was ousted from her job as a rural development official in 2010 after Breitbart posted an edited video of Sherrod, who is black, supposedly making racist remarks. She sued Breitbart, O'Connor and an unnamed defendant for defamation and emotional distress after USDA officials asked her to resign and the video ignited a racial firestorm.
Breitbart died unexpectedly last year. Sherrod's lawyers say the unnamed defendant is the person whom they believe passed the video on to Breitbart, though the person's identity remains unknown.
The video on Breitbart's website turned out to be edited, and when Sherrod's full speech to an NAACP group earlier that year came to light, it became clear that her remarks about an initial reluctance to help a white farmer decades ago were not racist but an attempt at telling a story of racial reconciliation. Once that was obvious, Sherrod received public apologies from the administration, even from President Barack Obama himself, and an offer to return to the Agriculture Department, which she declined.
Sherrod's 2011 lawsuit says the incident affected her sleep and caused her back pain. It contends that she was damaged by having her "integrity, impartiality and motivations questioned, making it difficult (if not impossible) for her to continue her life's work assisting poor farmers in rural areas'' even though she was invited to return to the department.
O'Connor's lawyers had argued to have the case dismissed under a District of Columbia statute that aims to prevent the silencing of critics through lawsuits. The statute is called anti-SLAPP, or "strategic lawsuit against public participation.''
A federal district court judge rejected their motion to dismiss, citing timing and jurisdictional issues, prompting the appeal. The appeals court affirmed that O'Connor's lawyers missed the deadline for filing the dismissal request.
In March arguments, the lawyers told the court of appeals that O'Connor and Breitbart, before he died, stood by the content, saying the blog post was opinion.
"What happened here is what happens in journalism every day,'' said Bruce Brown, a lawyer for O'Connor.
Sherrod's lawyers disagreed and said dismissal under the District of Columbia statute would violate their right to a trial.
The case has been closely watched as a test of the District of Columbia's anti-SLAPP statute.